Tracker Mortgage Costing Banks Money

MORTGAGE lenders are losing money on most tracker mortgages as they are costing them more to fund than they are receiving in interest income.

Around 400,000 people have tracker mortgages, with some paying rates as low as 0.75pc above the European Central Bank rate (ECB). The deal with a tracker is that it ‘tracks’ the ECB and will rise or fall by a set percentage only when the ECB rate moves.

Most tracker holders pay a margin of between 1pc and 1.25pc above the ECB rate. The margin was set when they drew down their mortgage

But are the banks not able to avail of the ECB interbank facilities which provide funds at 1%, my understanding is that the ECB have provided 150B of these funds already (and why they are anxios to get it back)

Since the banks can borrow at 1%, how can a tracker mortgage which is based on the 1% with a profit margin on top be losing them money?

This is purely an attempt to blame the tracker holders for the banks problems and enginerr a way for the state to allow thae banks to renage on those contracts. The losses being suffered could just as simply be attributed to other parts.